Analysts Expecting eBay to Beat Q2 Estimates, but Cautious on Outlook

Analysts will be looking for signs of weakness in eBay’s results tomorrow when the company releases second-quarter earnings after the bell.

Despite a relatively stable and growing U.S. business from both its marketplace and payments division, Citi’s Mark Mahaney cautioned in a research note, eBay’s results could be adversely impacted by the currency crisis in Europe.

eBay

Earlier this month, Mahaney reduced his estimates for the quarter because of economic uncertainty and the fact that international makes up about half of all of eBay’s revenue.

Analysts surveyed by FactSet Research currently estimate that eBay will earn 55 cents a share, excluding one-time items, on revenue of $3.36 billion, compared with a profit of 48 cents a share on $2.8 billion in sales in the same period a year ago.

Those expectations exceed eBay’s own goals, which forecasted revenue in the range of $3.25 billion to $3.35 billion, with GAAP earnings per share in the range of 49 cents to 51 cents and non-GAAP earnings per share in the range of 53 cents to 55 cents — both on a diluted basis.

Mahaney is expecting a slightly more modest report of $3.33 billion in revenue and 54 cents in non-GAAP earnings per share.

Today, eBay’s shares traded higher, closing at $39.07, or a few dollars shy of its 52-week high of $43.94 a share.

Other analysts believe that the impact won’t be felt for another few months, even though just last quarter, eBay raised full-year guidance, saying that it expects revenue in the range of $13.8 billion to $14.1 billion, with GAAP earnings per share of $1.91 to $1.96.

Chad Bartley of Pacific Crest Securities said that eBay’s results “should be fairly solid,” even though e-commerce trends in the quarter proved to be challenging. In general, the U.S. held up better than Europe, but still there was some softness.

According to MarketWatch, Bartley believes eBay will achieve Wall Street consensus forecasts for this quarter, but that the company’s outlook could end up missing projections.

As a result, analysts tomorrow will be watching eBay’s fiscal third-quarter forecast closely to see if it matches their expectations of earning 55 cents a share on $3.42 billion in sales.

Over the past year, the company has been executing well on its three main businesses: Marketplaces, PayPal and GSI. It is also spending a lot of time formulating its strategy for both mobile payments and working with offline retailers. Expect updates on those initiatives, too, even though it will still take a while for them to produce any material revenue.

EBay, which is typically the first of the major e-commerce companies to report earnings, often sets the tone for others. Amazon will release its second-quarter results next Thursday.


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